Time To Take Some Risk Off The Table
Cam Hui | Apr 04, 2012 03:36AM ET
After turning neutral in January and then bullish in early February, the This bull depends on the US consumer ). The chart of Consumer Discretionary stocks relative to the market shows that this sector remains the market leaders - and the health of this bull depends on the American consumer.
(This chart also underlines the importance of the NFP release this Friday to the continued health of this equity bull.)
What does this all mean?
Putting it all together, I interpret the model readings as telling that of the three regions, one is strong (US), one is consolidating (Europe) and the third is weak (China). This is not a sign to panic, but to become more neutral in your asset allocation and risk budgeting decisions. Within the riskier portions of the portfolio, I would be inclined to tactically tilt towards US and US Dollar denominated asset classes.
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